anniversary rating date

In some types of insurance that are subject to experience rating,
such as workers compensation insurance, the date that governs the
application of rates and experience modifiers when a prior policy
has been canceled midterm. It prevents either the insured or the
insurer from canceling a policy midterm to take advantage of a more
favorable rate structure. It also may have application for changes
of ownership or combinations of ownership. For an example of how
the anniversary rating date applies in the case of a canceled policy,
assume a workers compensation policy is written for a 1-year term
effective January 1, 2014. It is subsequently canceled and rewritten
effective July 1, 2014. The new policy would carry an anniversary
rating date of January 1, 2015. The rates effective on14 July 1,
2014, when the new policy is issued, are those that were effective
January 1, 2014, not those that are currently effective. On January
1, 2015, the anniversary rating date, the policy is endorsed to
apply the rates and modifier effective January 1, 2015. Then, when
the new policy expires July 1, 2015, and is renewed, the anniversary
date becomes July 1 and stays that date until some event causes
the process to begin all over. See also
Anniversary date.